The fifth BRICS summit ended Wednesday with leaders agreeing to establish a development bank, while several agreements were signed to strengthen cooperation within the grouping and enhance engagement with other emerging and developing economies.
New BRICS chairperson and South African President Jacob Zuma told a media briefing early Wednesday afternoon that following a report from the finance ministers, the leaders were satisfied that the establishment of the bank was feasible and viable.
This was after the consideration that developing countries faced challenges of infrastructure development due to insufficient long-term financing and direct investment, especially in capital stock, and constrained aggregate demand.
As a result, there was need for BRICS cooperation towards more productive use of global financial resources to make a positive contribution to the process.
"We have agreed to establish the new development bank. The initial capital contributions for the bank should be substantial and sufficient for the bank to be effective in financing infrastructure," he said.
The development bank would be based on the needs of the BRICS countries which require about $4.5 trillion over the next five years for infrastructural development, he said.
Zuma added that BRICS leaders had also in June 2012 tasked finance ministers and central bank governors to explore the construction of a financial safety net leading to the creation of a Contingent Reserve Arrangement (CRA) within BRICS countries.
Leaders agreed that the creation of the CRA with an initial size of $100 billion was also viable subject to internal legal frameworks and appropriate safeguards.
"We direct our finance ministers and central bank governors to continue working towards its establishment. We are grateful to our finance ministers and central bank governors for the work undertaken on the new development bank and contingent reserve arrangement.
"We direct them to negotiate and conclude the agreement which will establish them. We will review progress made in these two initiatives at our net meeting in September 2013," he said.
Agreements signed during the summit included one on green economy cooperation co-financing and another on infrastructure co-financing for Africa.
The leaders also launched the BRICS Business Council, which will provide business to business linkages within the grouping, while an agreement on the establishment of a BRICS Think-Tanks Council that was signed on March 11 was formally declared.
They also recognized the fifth BRICS Academic Forum and the role of academics in fostering dialogue.
Indian Prime Minister Manmohan Singh urged BRICS nations to promote the forum by allowing academics to share their unique experiences, particularly in the areas of energy, food security, education, health care, sustainable development, information technology and public service.
"Our roadmap of the future should focus on deepening of our existing cooperation."
The foremost challenge facing the BRICS nations was to respond to persistent weaknesses in the global economy, he said.
"Recognizing that BRICS countries will remain key drivers to global economic growth, we should further sustain our growth by harnessing opportunities and investment ties between ourselves," he said, adding that they should exploit their complementarities for their mutual benefit taking into consideration their unique resources and strengths.
Singh also highlighted the challenges of terrorism and piracy and said that it was incumbent upon the nations to use their collective voice and capacity to make an effective and meaningful contribution to these challenges and foster global peace and security.
Russian President Vladmir Putin said he hoped that BRICS nations would continue working on a professional level and called for the strengthening of technological and industrial markets while special attention should be given to expanding business ties.
He also encouraged the promotion of the green economy for sustainable development: "We will need to implement the highest environmental standards."
China's President Xi Jinping said the leaders of the five BRICS countries were full of confidence in the potential of the grouping saying that the countries shared broad common interests and that the establishment of the development bank would unlock the potential for BRICS cooperation.
He called for greater balance to the global economy and greater democracy in international relations, pledged China's continued readiness to play a part in forging ahead BRICS ties and added that China had already established strategic partnerships with others.
Besides the summit proper, BRICS nations also signed bilateral agreements among themselves as they sought to cement relations within the context of the transcontinental grouping.
Addressing a plenary session earlier in the morning, Zuma said it was appropriate that the leaders celebrate BRICS achievements, including its further contributions to the strengthening of the global agenda to ensure a more equitable and prosperous world.
"The BRICS Forum offers member states the opportunity of amplifying voices for political, financial, economic and social interests around common goals and development agenda based on shared values."
He said there was need to forge a paradigm shift in global relations and cooperation.
"BRICS countries continue to power, stabilize and support the global economy. We, however, should remain vigilant to underlying weaknesses and risks in the global economy."
He said BRICS countries would continue to consider crisis situations in the world and would coordinate closely as they sought to achieve global peace and security in line with the United Nations Charter.
The shared vision of integration and industrialization would remain at the core of BRICS cooperation, he said.
There was need for emerging countries to enjoy the fruits of their resource endowments by shifting from primary to industrial development and thus beneficiate their goods.
Shifting to his country, he said South Africa was keen to learn from the experiences of others and wanted to upgrade about 3.2 million youths into formal employment while enhancing skills development.
(Xinhua News Agency March 27, 2013)